Your overview of economic and policy news with a focus on the food and consumer goods industry. Featuring the latest developments and guidance on the rising cost of living, the Ukraine crisis, labour shortages, policy developments and adapting to a new relationship with the EU.
Inflation and interest rates impact
The interest rate on the average two-year mortgage is around 6% for the first time in 15 years. This will have a significant impact on the spending power of those with mortgages and those who rent. Consumers are also being impacted by relatively high food price inflation. Our research has revealed that 41% of consumers plan to reduce spend on food and grocery shopping in the next few months to manage the ongoing cost-of-living crisis.
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Independent labour review
The Independent review of labour shortages in the food supply chain has found that there is a skills shortage that is not strong enough to meet current and future demand of the food sector.
The review recommends 10 key recommendations for the government to take to ensure businesses can access the labour they require. The government has committed to responding to the review in Autumn 2023.
Developing skills in the food industry
One of the recommendations made in the Independent Review of Labour Shortages in the Supply Chain, is that the Food and Drink Sector Council (FDSC) leads the implementation of “a comprehensive strategy to enhance sector attractiveness”, collaborating with key industry organisations, including IGD.
Naomi Kissman, Social Impact Director stated that “This is a hugely exciting programme of work and we’re looking forward to discussing how we use our extensive experience in this field to bring to life the recommendations from today’s review.”
To discover more about IGD’s employability programmes see here.
HFSS in Wales
The Welsh Government plans to bring forward legislation next year to restrict the location and volume price promotions of products high in fat, salt and sugar (HFSS). It was confirmed that temporary price promotions and meal deals are in scope of the legislation at this stage.
Consistency with the location and volume price promotion restrictions in England will be considered to ensure operability across borders. It is intended that the policy will come into force by 2025.
Last week, the UK Government delayed the planned restrictions on multibuy promotions on HFSS products to October 2025 in England.
Availability concerns stable
In the latest consumer research conducted for IGD (23-25 June 2023), two thirds of adults (64%) experienced shortages of some food and groceries in-store or online recently. This has remained stable since last month. While this is the lowest level since September 2022, it is still significantly higher than when this was first measured in July’21 (50%).
See here for our full analysis.
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Our round-up of the latest economic and political news, focused on FMCGs